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Competition and Consumer Act 2010 (Cth)

Section 81A
Divestiture where merger done under clearance or authorisation granted on false etc. information

 

The provision

Circumstances when this section applies

(1) This section applies if the Court is satisfied that:

(a) a person (the acquirer) has acquired shares in the capital of a body corporate or assets of another person; and

(b) before the acquisition, the acquirer was granted, under Division 3 of Part VII (mergers), a clearance or an authorisation for the acquisition on the basis of information that was false or misleading in a material particular; and

(c) that information was provided by the acquirer or a body corporate that was related to the acquirer; and

(d) the Court or another court has found that the acquirer or related body corporate has contravened section 95AZN or Part 7.4 of the Criminal Code by giving that information; and

(e) if that information had not been given, the clearance or authorisation would not have been granted; and

(f) apart from the clearance or authorisation, the acquisition would have contravened section 50; and

(g) any or all of those shares or assets are vested in the acquirer, the related body corporate or any other body corporate that is related to the acquirer.

Divestiture by the acquirer and related bodies corporate

(2) The Court may, on the application of the Commission, by order, give directions for the purpose of securing the disposal of all or any of those shares or assets by the acquirer, the related body corporate or any other body corporate that is related to the acquirer.

(3) However, the Court must not make an order under subsection (2) if:

(a) the acquirer was granted, under Division 3 of Part VII, both a clearance and an authorisation for the acquisition; and

(b) the matters in subsection (1) are not satisfied in relation to both the clearance and the authorisation.

Example: If a clearance for an acquisition was granted by the Commission on the basis of false or misleading information, and an authorisation for the acquisition was granted by the Tribunal on the basis of true information, then the Court cannot make an order under subsection (2) because subsection (1) would not be satisfied in relation to the authorisation.

Declaration that acquisition void—when vendor involved

(4) In addition to being satisfied of the matters in subsection (1), if the Court, or another court, has found that the person (the vendor) from whom the acquirer acquired the shares or assets was involved in the contravention referred to in paragraph (1)(d), then the Court may, on the application of the Commission, by order, declare that the acquisition, in so far as it relates to those shares or assets, is void as from the day on which it occurred.

(5) If the Court makes an order under subsection (4), then: (a) the shares or assets to which the declaration relates are taken not to have been disposed of by the vendor; and (b) the vendor must refund to the acquirer any amount paid to the vendor for acquiring the shares or assets.

(6) However, the Court must not make an order under subsection (4) if:

(a) the acquirer was granted, under Division 3 of Part VII, both a clearance and an authorisation for the acquisition; and

(b) the matters in subsections (1) and (4) are not satisfied in relation to both the clearance and the authorisation.

Alternative to orders under subsections (2) and (4)

(7) If an application is made to the Court for an order under subsection (2) or (4) against a person, the Court may, instead of making an order of the kind mentioned in that subsection, accept, upon such conditions (if any) as the Court thinks fit, an undertaking by the person to dispose of other shares or assets owned by the person.

When application for orders under this section must be made

(8) An application under subsection (2) or (4) may be made at any time within 3 years after the day on which the acquisition occurred.

Court may make orders even if not satisfied of all matters

(9) If an application for an order under subsection (2) or (4) is made, the Court may, if the Court determines it to be appropriate, make an order by consent of all the parties to the proceedings, whether or not the Court is satisfied of:

(a) for an order under subsection (2)—the matters in subsection (1); and

(b) for an order under subsection (4)—the matters in subsections (1) and (4).

 

Legislative history

Forthcoming

 

Commentary

Forthcoming